Lou Simpson

Last Update: 08-15-2016

Number of Stocks: 14
Number of New Stocks: 2

Total Value: $2,363 Mil
Q/Q Turnover: 6%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Lou Simpson Watch

  • Valeant: Heads I Win, Tails I Don't Lose Much

    There are several reasons to dislike Valeant Pharmaceuticals (NYSE:VRX). Lack of management credibility, accounting irregularities and other legal investigations related to a price increase on a couple of drugs have caused its share price to fall from the high of $260 to $28.95. Investors in the company, including me, had a stomach-churning experience.

    It's always disheartening to see the value of the investment fall within a space of few months, or even days in this case. The market has a way of humbling even the best of hedge fund managers: Bill Ackman (Trades, Portfolio), Value Act, Sequoia and Lou Simpson (Trades, Portfolio) all have large stakes in Valeant. A few of them had a cost basis in the mid 100's.


  • Lou Simpson Buys Berkshire, Wells Fargo, US Bancorp

    Lou Simpson (Trades, Portfolio) manages a portfolio composed of 12 stocks with a total value of more than $3 billion. During the fourth quarter, he increased his stakes in the following seven stocks.

    The guru increased his stake in Valeant Pharmaceuticals International Inc. (VPX) by 38.18% with an impact of 2.51% on the portfolio.


  • Is Valeant a Good Buy Now?

    Valeant Pharmaceuticals (NYSE:VRX) has been on a wild ride over the past several years. It was once the stock market darling when its stock price jumped from $40 per share in 2012 to $250 per share in July last year. Then it plunged to only $87 at the time of this writing. Investors have been in doubt about the company’s business model and accounting practices. However, value investors such as Lou Simpson (Trades, Portfolio) and T Rowe Price Associates have been buying its shares. Should we follow them into this stock? Let’s dig deeper.

    In October last year, Citron released its bearish research on the company. Citron focused on the company’s relationship with Philidor and R&O Pharmacy. It pointed out that Philidor and R&O Pharmacy were the same company with the same toll-free number to reach the privacy officer. Citron also compared the company with infamous Enron, the company with hot stock and fraudulent accounting in 2001. Before joining Enron in 1990, Jeff Skilling had no experience running a business, having spent 11 years working for McKinsey. Michael Pearson, Valeant's ex-CEO, also worked for McKinsey for 23 years before joining Valeant. Citron thought that when others discovered Philidor, Valeant said the company had purchased an option to acquire Philidor in late 2014. In the report, Citron lowered their target price to $50 per share.


  • In Vast Difference From Berkshire Style, Lou Simpson Adds to Valeant Position

    Former Geico CIO Lou Simpson (Trades, Portfolio) is well known for having been a trusted manager of the Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) subsidiary, of whom Warren Buffett often sang the praises in his annual shareholder letters. As demonstrated in his fourth-quarter trades, however, Simpson can also have vastly different investment ideas than what can be considered a classic Buffett company.

    One clear example of Simpson’s occasional differences from Buffett and Charlie Munger (Trades, Portfolio)’s style is his current investment in Valeant Pharmaceuticals (NYSE:VRX), whose troubles dominated headlines toward the end of last year. In the fourth quarter, Simpson purchased an additional 745,631 shares in Valeant, upping his stake by 38%. The average price paid for the shares was $112.18, about half the average price he paid during the previous quarter.


  • Lou Simpson Adds to Valeant Stake

    Guru Lou Simpson (Trades, Portfolio) ran the Geico insurance, a subsidiary of Berkshire Hathaway (BRK.A) (BRK.B) for more than three decades with outstanding returns. In his 2004 letters to shareholders, Warren Buffett (Trades, Portfolio) dedicated an entire section to Lou Simpson (Trades, Portfolio) called "Portrait of a Disciplined Investor."



  • Don't Let Mr. Market Separate You From a Great Company

    Over a five-year period, the price of a stock will largely track the fundamentals of the company rather than its quarterly economic reports. We live in a world in which information on virtually anything is no further away than your smartphone.

    With the ability to access information and the media’s reporting on the stock market as though it were a sports event, investors lose track of the long term and focus too much on the short term.


  • Lou Simpsons' High Quality Stocks Include Ametek, Berkshire

    Warren Buffett met Lou Simpson (Trades, Portfolio) in 1996 when he was CEO of Geico's capital operations and Buffett was completing his purchase of Geico. Throughout his time with Berkshire, Simpson and Buffett's stock picks sometimes overlapped due to similarities in their thinking, but both men clearly had independent processes and disagreed with each other sometimes as well.

    The following are the holdings in Simpson's portfolio with the highest GuruFocus business predictability rating.


  • Lou Simpson Increases 7 Stakes in 3rd Quarter

    Warren Buffett met Lou Simpson in 1996 when he was CEO of Geico's capital operations and Buffett was completing his purchase of the insurance company. Buffett kept Simpson on as chief investment officer. At his retirement from Geico in 2010, Simpson managed more than $4 billion worth of stocks.

    During the third quarter, Simpson's investment firm SQ Advisors bought shares of seven companies, and all of them have been additions to existing stakes.


  • Simpson and Greenberg Buy Brookfield Despite Negative Report

    Recently the Probes Reporter wrote a negative report on Brookfield Asset Management (NYSE:BAM) calling it "An Unanalyzable Black Box." In the report it discusses several government investigations, lack of disclosures about the investigations and Brookfield Asset Management's financial engineering.

    This comes about 2½ years after the Southern Investigative Reporting Foundation "SIRF" wrote a negative report discussing Brookfield Asset Management's history, IFRS accounting practices and other issues. SIRF would write another report six months later in November 2013 further questioning Brookfield Asset Management.


  • Buffett-Endorsed Investor Lou Simpson's Top 5 Stock Increases

    Lou Simpson (Trades, Portfolio), an investor with Warren Buffett (Trades, Portfolio) connections, disclosed Monday he boosted stakes in his largest holdings during the third quarter and purchased no new stocks.

    Simpson’s portfolio activity during the quarter resulted in two new top positions in the portfolio – Ametek Inc. (NYSE:AME) and Brookfield Asset Management (NYSE:BAM) – replacing Charles Schwab Corp. (NYSE:SCHW) and Valeant Pharmaceuticals (NYSE:VRX). Other largest increases were to Liberty Global PLC (NASDAQ:LBTYK), Valeant and Berkshire Hathaway (NYSE:BRK.B).


  • My Indirect Experiences With Valeant Pharmaceuticals

    Valeant Pharmaceuticals International Inc. (NYSE:VRX) has been a hot topic recently with high-profile investors and short sellers both involved in one of the most interesting dramas ever. Valeant's shareholder base includes some of the most admired investors including Bill Ackman (Trades, Portfolio), Jeff Ubben (Trades, Portfolio), the Sequoia Fund, Lou Simpson (Trades, Portfolio) and Wallace Weitz. It is really fascinating to watch on the sideline as the events unfold.

    This is not intended to add any personal thoughts on whether or not Valeant’s business is legitimate or not as I don’t know enough about the business to have useful insights. But over the past year, I’ve been exposed to Valeant in a few incidents, which I think may be worthwhile to share with the readers.


  • Lou Simpson Boosts Stake in Charles Schwab

    Warren Buffett (Trades, Portfolio) once dedicated a section of his annual letter to shareholders to Lou Simpson (Trades, Portfolio), who was Buffett’s chief investment officer at Geico for more than a decade. The section about Simpson was titled “Portrait of a Disciplined Investor.” When Simpson retired in 2010, he managed more than $4 billion worth of stocks.

    Simpson’s most significant transaction in the second quarter was his addition of 3,896,783 shares to his existing stake in Charles Schwab Corp. (NYSE:SCHW), a brokerage and banking company based in San Francisco. Simpson paid an average price of $31.58 per share in a deal that had a 4.13% impact on his portfolio.


  • GuruFocus Interview: Jeff Auxier of Auxier Asset Management

    At 11 years old, Jeff Auxier (Trades, Portfolio) began mowing the lawn of Georgia Pacific’s then-CEO Bob Pamplin Sr., who led the company to be one of the top-performing NYSE stocks of the time. After graduating college with his degree in finance and starting his career in 1982, Auxier decided to cold call Warren Buffett (Trades, Portfolio) — and got an answer.

    Whether by luck or simply taking a chance, Auxier was influenced by value investors from an early age, and this is reflected in his firm, Auxier Asset Management. The firm is based far from Wall Street on the opposite coast in Portland, Oregon, where Auxier lives on a 108-acre hazelnut farm.


  • Simpson and Buffett BOTH own this wide moat stock.

    Precision Castparts (NYSE:PCP) was founded in Portland, Oregon circa 1949. The company manufactures structural investment castings, forged components and airfoil castings for aircraft jet engines and power turbines.

    Despite having a website that looks straight out of 1999, doing the brand zero justice, the underlying company is rock solid. It has large customers like General Electric (NYSE:GE), Rolls-Royce (RR.), Airbus (NYSE:AIR) and Boeing (NYSE:BA) that have all bought from the company for decades.


  • Lou Simpson Adds Precision Castparts to Portfolio in First Quarter

    Warren Buffett (Trades, Portfolio) has called Lou Simpson (Trades, Portfolio) “a cinch to be inducted into the investment hall of fame,” and he should know. Simpson was CEO of capital operations for GEICO when Buffett bought the company in 1996, and he remained with the company until 2010.

    Over a quarter of a century, Simpson produced average annual gains of more than 20%.


  • This Buffet-Munger Name Is More Growth Stock than Value Stock

    When pension funds and big money managers want value propositions beyond the stock and bond markets, they call on companies like Brookfield Asset Management Inc. (NYSE:BAM).

    We might call it one of the 800-pound gorillas literally searching the world for under-priced assets, especially in real estate, renewable energy, and infrastructure (among others). Brookfield has more than $200-billion in assets under management, and a big war chest that will allow it to make major acquisitions when it finds properties it likes.


  • Guru Stocks at 52-Week Lows: UPS, HST, KORS, FAST, TIF

    According to GuruFocus' list of 52-week lows, these Guru stocks have reached their 52-week lows.

    United Parcel Service Inc reached the 52-week low of $96.14


  • Dividend Yield Investing in American Financials

    Dividend Yield Investing in American Financials

    Investors use various methods for valuing financial companies, such as discounted cash-flow valuation, residual income valuation, as well as price multiple and momentum valuation. Dividend yield investing is another common approach. In its simplest form, dividend yield investing involves identifying among a group of comparable companies the firms offering the highest dividend yields and then investing in those companies.


  • Former Warren Buffett CIO Lou Simpson Buys Liberty Global, Valeant, U.S. Bancorp, Sells TE Connectivity

    If you don’t know Lou Simpson (Trades, Portfolio), you should. He was the former investment manager at GEICO and Warren Buffett (Trades, Portfolio) spoke highly about him many times. Mr. Simpson just reported his third quarter portfolio. He buys Liberty Global PLC, Valeant Pharmaceuticals International Inc, U.S. Bancorp, Charles Schwab Corp, Brookfield Asset Management Inc, Oracle Corporation, Wells Fargo & Co, Berkshire Hathaway Inc, Crown Holdings Inc, sells TE Connectivity Ltd during the 3-months ended 09/30/2014, according to the most recent filings of his investment company, SQ Advisors, LLC. As of 09/30/2014, SQ Advisors, LLC owns 13 stocks with a total value of $2.6 billion. These are the details of the buys and sells.

  • Motley Fool's Top Positions in the Financial Sector

    Recently, hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission. In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Motley Fool Asset Management.

    Recently, the fund reported its equity portfolio ended September. The total value of the portfolio amounted to $492.4 million, down from $521.5 million disclosed at the end of the previous quarter. Consequently, the fund's equity market change value was negative 21.5 million in the last quarter. The filing revealed that at the end of September, the fund added three new positions to its equity portfolio and sold out three positions. The top 10 portfolio holdings as of the end of the quarter represented 29.03%. The largest changes from previous 13-Fs fillings are in the energy and consumer discretionary sectors.


  • Notes From Charlie Munger's DJCO 2014 Shareholder Meeting

    “Welcome to the largest DJCO shareholder meeting not counting shareholders. We have a few shareholders and lots of groupies.

    “I welcome all of you including the groupies.

  • Former Warren Buffett CIO Lou Simpson Buys Berkshire Hathaway, Wells Fargo, U.S. Bancorp, Oracle, Crown Holdings

    Former Warren Buffett (Trades, Portfolio) CIO Lou Simpson (Trades, Portfolio) Buys Berkshire Hathaway, Wells Fargo, U.S. Bancorp, Oracle, Crown Holdings

    Former Warren Buffett (Trades, Portfolio) CIO Lou Simpson (Trades, Portfolio) just reported his second quarter holdings. Mr. Simpson managed the investment portfolio of GEICO for many years before started his own shop SA Advisors. Warren Buffett (Trades, Portfolio) spoke highly about him many times. He buys Berkshire Hathaway Inc, Wells Fargo & Co, U.S. Bancorp, Oracle Corporation, Crown Holdings Inc, Brookfield Asset Management Inc, United Parcel Service Inc (NYSE:UPS), Charles Schwab Corp during the 3-months ended 06/30/2014, according to the most recent filings of his investment company, SQ Advisors, LLC. As of 06/30/2014, SQ Advisors, LLC owns 13 stocks with a total value of $2.5 billion. These are the details of the buys and sells.  

  • 'We do not rely on Wall Street-generated research' - A Look at Former Buffett Stock Picker Lou Simpson's Historical Success

    "My approach is eclectic. I try to read all company documents carefully. We try to talk to competitors. We try to find people more knowledgeable about the business than we are. We do not rely on Wall Street-generated research. We do our own research.”

    - Lou Simpson (Trades, Portfolio)


  • Lou Simpson’s Top Five Stocks at Year End

    Lou Simpson (Trades, Portfolio) did not make any new buys or sell outs over the past quarter, but he was very active in increasing and decreasing the positions he holds. As of the most recent quarter Simpson holds on to 13 stocks valued at over $2.1 billion. The following five companies represent the guru’s top holdings as of the close of the fourth quarter.

    United Parcel Service (UPS)


  • Buffett’s Former Stock Picker Lou Simpson’s Q3 Portfolio Increases

    Lou Simpson is an investor with an outstanding track record: He returned 24.7% on average annually in his 17 years at GEICO before it was purchased by Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B). Simpson stayed on working for Buffett for another decade following the acquisition before retiring in 2011 and opening his own investment-advisory firm, SQ Advisors LLC.

    Simpson’s firm began with approximately $1.3 billion in assets under management which had grown to approximately $1.64 billion at March 31, 2013.  

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